The boom is coming back at Boeing
Company ramps up production; hiring to continue upward trend

By JAMES WALLACE
SEATTLE POST-INTELLIGENCER AEROSPACE REPORTER

For the first time since 2001, business seems to be booming at The Boeing Co.'s Puget Sound-area factories -- enough that it's increasing output at Renton and Everett factories.

The company plans to open a second production line in Renton that will push output there to a record 31 planes a month. It is also requiring some 777 workers in Everett to work overtime and will replace a key executive there amid a series of production problems before it boosts output of that twin-aisle jetliner as well.

But the company says hiring likely will continue at the modest pace of the past several months.

Although the company won't comment about current or future production rates, a Boeing spokeswoman confirmed late yesterday that another 737 assembly line is in the works.

"We are preparing to implement a second moving line to provide flexibility to meet increasing demand over the next few years," the spokeswoman said.

The aim is to be able to increase the 737 build rate to a record 31 planes a month, and possibly even higher, according to people familiar with the company's thinking. That's six or seven planes a month more than currently produced.

Boeing also plans to boost production of its 777 in Everett. But that line is experiencing breakdowns serious enough that a top factory executive is being replaced, according to a well-placed source on the 777 program. The source said mandatory overtime has been initiated so 777 mechanics can catch up on back work. A Boeing spokesman acknowledged yesterday that "pockets" of mechanics on the 777 line are being required to work overtime.

One way to measure the progress of a plane in its production cycle is by how many "jobs" or tasks mechanics are behind at certain points during assembly. On a recent 777 in final assembly, according to the source, workers were several hundred jobs behind. Typically, falling 50 or so jobs behind would be cause for concern.

Boeing disputed that the number of jobs on any recent 777 in final assembly had slipped so far behind. But the company acknowledged there have been production issues.

"Our leadership is managing this on a day-to-day basis," said Marc Birtel, Boeing's 777 spokesman. "We are managing it and watching it."

He said Boeing is working on the production problems internally as well as with its chain of suppliers. But the source said things are so bad that Mary Dowell, the 777 final assembly superintendent, has been replaced. Birtel declined comment on that.

Boeing is in the process of transforming the way it assembles the 777 to gain improved efficiencies and lower the cost of production in an all-out effort to be more competitive with Airbus. At the same time, it is gearing up to boost production in response to growing demand for the 777, especially the new long-range 777-300ER. Boeing also has the even newer 777-200LR in the production pipeline. That plane, which will be the world's longest-range commercial jetliner when it enters service next year, is now in flight tests.

Although Boeing won't discuss production rates, the 777 is currently on what's known as a five-day cycle, meaning four planes are assembled each month, according to workers. That may go up to as many as seven planes a month as orders continue to roll in, they say.

In the late 1990s, as it ramped up production to record levels, Boeing faced assembly line meltdowns in Everett and Renton. Production had to be briefly stopped on the 737 and 747 programs when assembly lines became snarled. Workers on the 777 line say today's production problems are nowhere near as bad as they were in 1997.

"Our transformation (of the 777 production) has its challenges," Birtel acknowledged. "We are changing processes and the way things are set up."

Boeing assembles the 777 on a "moving" line, which was first implemented successfully on the 717 program in Long Beach, Calif., and later on the next-generation 737 program in Renton.

The lean manufacturing efforts have reduced final assembly time of the 737 to about 12 days. Five years ago, a 737 required 22 days in final assembly. Boeing's manufacturing plan is to eventually cut 737 final assembly time to eight days. Even though the twin-aisle 777 is a far more complex airplane, Boeing believes its ongoing 777 production transformation in Everett will eventually reduce the jet's final assembly time to fewer than 10 days.

Although Boeing production rates are going up again, that does not mean the company will be hiring large numbers of workers.

The company has made it clear that it expects only a "gradual" increase in its Puget Sound commercial employment as the airplane market improves and production is increased.

The latest company employment numbers reflect the trend.

Another 456 Boeing jobs were added in Washington state between April 5 and May 5.

At the start of 2005, Boeing's employment in Washington state was 55,434. As of May 5, it stood at 57,489. Boeing does not break out its job totals by work site.

By the time production ended late last year on the 757 program in Renton, most of those workers had been shifted over the work on the 737.

Boeing also has been adding engineers on its 787 program in Everett as well as engineers for the Navy's Multi-mission Maritime Aircraft. This will be a military version of the 737 for the U.S. Navy that will replace the current P-3 planes used as sub hunters. Boeing won this competition over Lockheed Martin last year. Eventually, the Navy wants more than 100 of the Boeing jets.

Boeing disclosed yesterday that these Navy 737s will be assembled in a building adjacent to the Renton plant where the commercial 737s are now assembled. That other building is used to fabricate 737 wings.

In order to comply with the strict requirements of the U.S. International Traffic in Arms Regulations, or ITAR, access to the production line for the Navy's 737s must be restricted.

Other military derivatives of the 737, and in some cases 737s ordered by U.S. customers, will be built on that ITAR-compliant line, according to Boeing.

Production of the next-generation 737 hit its all-time high of 28 planes a month in 2001, only days before the Sept. 11 terrorist attacks. Boeing quickly slashed production by half across all its airplane programs as the airline industry headed for its worst downturn ever.

At the time of the terrorist attacks, Boeing operated three 737 assembly lines in Renton, along with the 757 line. Eventually, those three 737 lines were consolidated into two lines, including one that was moving. In 2003, Boeing was down to just the single 737 moving line.

But now, Boeing needs a second assembly line to meet the recent surge in 737 orders.

The 737 has been the company's best-selling jet the last few years, just as the single-aisle A320 has been the top seller for Airbus. The planes are especially popular with low-cost carriers in the United States, Europe and Asia.

Of Boeing's 277 jetliner total orders last year, 152 were for the 737. This year, Boeing already has 98 firm 737 orders, with more in the works. And that does not include the planned order of 70 737s by Ryanair, Europe's biggest low-cost airline, announced earlier this year. A firm contract for that order is pending.

Just yesterday, China Southern Airlines announced it will order 45 737s. And separately, Boeing announced that GE Commercial Aviation has ordered six more 737s that will be leased to Sky Europe, a Central European low-cost airline.

The current 737 backlog -- planes not yet built -- is approaching 800.

In a recent interview, a senior Boeing jetliner sales executive said he could immediately place a dozen or more 737s with customers in Asia if the planes were available.

They aren't.

With production slots filled, customers have had to stand in a long line before taking delivery of their new 737s.

With a second assembly line coming, there will still be a waiting line for 737s. It just won't be as long.

"Just yesterday, China Southern Airlines announced it will order 45 737s. And separately, Boeing announced that GE Commercial Aviation has ordered six more 737s that will be leased to Sky Europe, a Central European low-cost airline."

Quoting DAYflyer (Thread starter):This year, Boeing already has 98 firm 737 orders, with more in the works. And that does not include the planned order of 70 737s by Ryanair, Europe's biggest low-cost airline, announced earlier this year. A firm contract for that order is pending.

Just yesterday, China Southern Airlines announced it will order 45 737s. And separately, Boeing announced that GE Commercial Aviation has ordered six more 737s that will be leased to Sky Europe, a Central European low-cost airline.

Quoting DAYflyer (Reply 4):It is also going to be interesting to see where they ramp up the 777 at; must be the 767 line, which is pretty quiet.

Actually, the 777 line has been running a bit slower than need be and Boeing's various breakthroughs are speeding it up via efficiency (especially the moving line). Since there are still 767s coming off the line, they can't just move 777s into the mix. The 777 will actually be moving into a new, smaller line and the 787 is planned to take over its current line.

Quoting N1120A (Reply 9):Actually, the 777 line has been running a bit slower than need be and Boeing's various breakthroughs are speeding it up via efficiency (especially the moving line). Since there are still 767s coming off the line, they can't just move 777s into the mix. The 777 will actually be moving into a new, smaller line and the 787 is planned to take over its current line.

Thanks, looks like I made a seriously wrong guess. I thought there were not very many unfilled 767 orders so they would use it for 777 for the next year while planning for 787 production.